In recent years, many retailers have built out retail media networks (RMNs) to attract advertisers and improve customer experience with favorite brands and products. Access to the wealth of first-party data that many retailers have is hard for advertisers to pass up. But RMNs need to mature.
This maturation took some big steps last year and will continue in 2024 as advertisers will test and integrate RMNs into their media strategy. Here are the directions that RMNs will take in the coming year.
Standardization as RMN matures
Last year, IAB rolled out RMN guidelines for public comment to generate substantive talks about how to compare apples to apples between networks. That requires a more comprehensive understanding of what advertisers get out of the exchange. Greater standardization of metrics will likely spur more ad spending on RMNS.
Half of CMOs said “rationalizing retail media with other media investments” is one of their biggest challenges with retail media, according to Forrester’s Q3 2023 B2C Marketing CMO Pulse Survey.
As standardization spreads, advertisers will be able to compare performance between different RMNs and compare the effectiveness of RMN campaigns with other marketing channels.
More RMN use cases to choose from
Advertisers will continue to experiment with RMN use cases. Forrester categorized RMNs as an “emerging” technology, signaling that growth, as well as growing pains, are to be expected.
Forrester identified four core use cases: first-party audience targeting; onsite activation; offsite activation; and near-real-time reporting. Standardization and growing acceptance of RMNs will increase their core use while opening the door to a bigger menu of extended uses.
Here are some of the extended use cases Forrester identified for RMN advertisers:
- Data clean room environments for data collaborations
- Multitouch attribution
- Forecasting and scenario planning
- Incrementality measurement
- Creative asset management that consolidates assets, workflows and teams
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Offsite RMN channels will step in as cookies crumble
The continued phasing out of third-party cookies will make retailers’ first-party data even more valuable to advertisers. Expect to see growing interest in using this data for offsite campaigns, including CTV.
Dig deeper: 2024 Predictions: Data and AI on marketers’ minds
“Retail media will continue its strong growth, as retailers continue to leverage their first-party data to build out ad networks and/or data businesses, both of which provide high-margin revenue,” said Frost Prioleau, CEO of programmatic advertising company Simpli.fi. “Much of the growth in 2024 will be driven by the ‘offsite’ advertising, where the retailers’ data is being used to target ads on the open web and/or CTV devices.”
“Throughout 2023, agencies and brands increasingly viewed retail media as a potent closed-loop marketing investment, directly linking ads to sales,” said Sherry Smith, executive managing director, Americas, at commerce media platform Criteo. “This next year will be equally as transformative, especially for retailers and other companies focusing on their first-party data advantage, as Google is set to phase out third-party cookies by the end of next year. Retail media will emerge as the cornerstone of effective omnichannel advertising, reshaping the narrative of commerce media as the trusted frontier for brands.”
While offsite media expands the reach and application of RMNs, this doesn’t mean that advertisers will abandon in-store opportunities.
“Retail media proved it’s an ecommerce force to be reckoned with in 2023, and we expect meteoric growth heading into 2024,” said Smith. “This will include additional investment for in-store retail media — where retailers will bridge the omnichannel gap between online and in-store experiences to influence shoppers at every touchpoint of their journey.”
Retailers looking for a competitive edge will improve in-store experience, making ads more relevant for in-person shoppers. For instance, The Home Depot, a medium-sized RMN, is piloting video screens in some locations.
“Expect retailers to get smarter with their in-store screens, and expect brands to start to bring their CTV campaigns out of the home, onto mobile and into retail and other out-of-home locations in 2024,” said Cathy Oh, head of marketing, Samsung Electronics America.
Oh explained: “As CTV ad capabilities continue to improve and evolve, digital screens get more dynamic, and retail media ecosystems explode, it will be critical for advertisers to shift their ad campaigns beyond the living room. Targeted multi-screen experiences will be key in 2024 to reaching consumers with messages that move with the medium.”
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